Regulating Crypto in the EU and UK
Cryptoassets continue to be a headache for regulators, with ongoing efforts to address insider trading, market manipulation, and related misconduct. The European Union has already implemented binding rules as of December, while the United Kingdom is crafting a tailored regime (MARC) to account for the unique challenges posed by digital assets.
EU: Enforcement Underway
The EU applies its Market Abuse Regulation (MAR) to cryptoassets that qualify as financial instruments. Under the Markets in Crypto-Assets Regulation (MiCA), fully in force since December 2024, crypto service providers must put systems in place to prevent and detect market abuse. Article 92(1) specifically requires firms arranging or executing transactions (PPAETs) to maintain effective controls. While insider lists aren’t explicitly required, they’re widely seen as a smart move under these rules.
As expected, the regime bans insider dealing, unlawful disclosure of inside info, and market manipulation tactics like spoofing and pump-and-dumps. Enforcement is already underway, with penalties issued and surveillance systems now standard for exchanges and custodians.
UK: Draft Legislation and MARC Lay Groundwork for Crypto Market Abuse Enforcement
On 29 April 2025, the UK government published draft legislation under the Financial Services and Markets Act 2000 aimed at bringing the cryptoasset sector into the country’s financial regulatory framework. The draft order introduces new regulated activities, including operating trading platforms, dealing in cryptoassets, staking, and safeguarding assets. These activities would now fall within the FCA’s supervisory perimeter, laying the structural foundation for future enforcement.
While this legislation does not yet codify market abuse rules, the accompanying policy note confirms that HM Treasury intends to legislate on cryptoasset market abuse in due course. This commitment directly supports the FCA’s ongoing consultation on the proposed Market Abuse Regime for Cryptoassets (MARC), a framework that was open for feedback until 14 March 2025.
MARC draws on the UK’s existing Market Abuse Regulation but is adapted to suit the decentralised and rapidly evolving crypto landscape. It would prohibit insider dealing, market manipulation, and the unlawful disclosure of inside information. Where no traditional issuer exists, sponsors applying to list a cryptoasset would be subject to disclosure requirements. The regime also outlines potential safe harbours for practices such as delayed disclosure or token-burning where these are considered legitimate and do not undermine market integrity.
To support enforcement, MARC proposes that exchanges and intermediaries implement real-time and post-trade surveillance, maintain on-chain monitoring systems, keep insider lists, and establish private information-sharing mechanisms between platforms. Notably, suspicious order reports (STORs) may be submitted directly to exchanges rather than to the FCA, an idea that has raised questions about the dilution of regulatory oversight.
The combination of the draft legislation and MARC indicates a clear policy direction: create a robust, enforceable regime that aligns crypto market standards with those of traditional finance. However, the proposals have also drawn criticism. Stakeholders have warned that the compliance burden could be excessive for smaller or decentralised projects, and that maintaining sophisticated on-chain monitoring tools may be unrealistic for many firms. Ambiguities around key definitions, such as “inside information” in token ecosystems, and questions about liability distribution further complicate implementation.
Despite these concerns, the FCA maintains that its goal is to promote fair, transparent, and orderly markets. With HM Treasury committed to enacting formal legislation and the FCA set to release a full consultation paper later in 2025, the UK is clearly preparing to bring cryptoasset market abuse into the regulatory mainstream.
Summary
The EU has already legislated and is enforcing its rules while the UK is shaping its approach through consultation. While different in timing and structure, both regimes are focused on increasing transparency, protecting investors, and ensuring fair market conditions in the crypto sector.